Offshore wind will more than pay for itself in future
A CEBR report commissioned by Mainstream Renewable Power, a multinational comnpany with an office in Glasgow, reveals that Offshore Wind will more than pay for itself in future and reap rich rewards in terms of jobs and UK GDP. The report is entitled The macroeconomic benefits of investment in offshore wind
The Cebr report finds:
- Offshore wind sector to boost UK GDP by 0.2% by 2015 and by 0.4% by 2020.
- Potential for UK Offshore wind sector to create 45,000 jobs by 2015, over 97,000 jobs by 2020 and 173,000 jobs by 2030.
- By 2030 with a £18.8 billion boost in net exports offshore wind could plug 75% of the UK’s current balance of trade deficit”.
(Dublin 12 June 2012) – Mainstream Renewable Power, the global renewable energy company, today announces the publication by London’s Centre for Economics and Business Research (Cebr) of a major new report into the economic impact of the UK’s offshore wind sector out to 2030. The Report has been published to coincide with the first ever Global Offshore Wind conference being held in London.
Two years ago, the Offshore Valuation Group measured the value of the UK’s offshore renewable energy resource and concluded that, by 2050 – by harnessing less than a third of that resource – the UK could generate the electricity equivalent of 1bn barrels of oil a year, reduce its CO2 emissions by 1bn tonnes and create over 145,000 new jobs.
This new June 2012 Cebr/MRP report builds on that work by exploring the impact of planned investment in offshore wind electricity generating capacity in the UK. It concludes that that investment can be expected:
- By 2015 to increase UK GDP by 0.2%, and create over 45,000 full time jobs, delivering employment and economic growth at a time of economic fragility.
- By 2020, to double that GDP contribution to 0.4%, and the number of people employed to over 97,000.
- By 2030 to triple that GDP contribution to 0.6%, and sustain 173,000 jobs. These benefits will accrue from pursuing current build out rates of offshore wind. A more aggressive, but achievable, approach could see an annual 1% uplift to GDP, and the creation of up to 215,000 jobs, and in addition, the sector could deliver an increase in net exports of £22.5bn, sufficient to almost entirely plug the UK’s current balance of trade deficit.
Furthermore, a foreign trade multiplier (FTM) analysis of the impact of increasing levels of offshore wind investments and exports leads Cebr to contend that significant multiplier impacts can be expected to derive from investment in offshore wind.
For instance, while Cebr predicts that by 2020, under its Accelerated Growth scenario, investment in offshore wind will generate £8.4 billion of Gross Value Add (GVA) to the UK economy, the application of their FTM model suggests that this contribution could rise to £10.5 billion.
These differences are even more marked by 2030, when the estimated difference in impact – between that suggested by the domestic and FTM multipliers – is (for employment) three times the difference estimated for 2020.
Commenting, Eddie O’Connor, CEO of Mainstream Renewable Power said “The “Value of Offshore Wind” to the UK is truly significant. Cebr shows that the net economic benefit to UK plc from investment in offshore wind is considerable. The foreign trade multiplier effect is of particular interest to a sector which has the potential to supply a global market. By helping the UK reduce fossil fuel imports, and by creating a new industry, offshore wind will create jobs, assist in balancing the trade deficit and boost GDP at a time of economic uncertainty.
“Later this year we will publish a companion paper which will show that offshore wind is a very attractive investment to include in a diversified, low carbon generation resource portfolio. Including a substantial amount of offshore wind will help in the achievement of the government’s long-term goals to decarbonise the UK’s electricity sector by lowering risk and cost to UK consumers.
“We have embarked on a once off transition to a sustainable economy. All forms of renewable energy, from solar energy to tidal energy, will contribute to delivering this transition in the UK. But offshore wind provides this country with a clear global comparative advantage, particularly when the UK government and industry will this week publish their strategy to reduce the cost of offshore wind to £100/MWh by 2020. Cebr’s findings underline the importance of that strategy, and the very significant potential economic benefit that this sector will deliver to the UK.”
Oliver Hogan, Head of Microeconomics at Cebr and principal author of the report said: “The current economic circumstances and the competitive challenges facing the UK highlight the importance of taking actions to improve the country’s trade balance. Such actions, by acting directly on the factor that is constraining growth, can be expected to have particularly important foreign trade multiplier impacts.
“It is Cebr’s contention that, given the positive impacts on the UK’s balance of trade outlined in our report, these significant multiplier impacts can be expected to derive from investment in offshore wind.”
Beatrice could become one of the world’s largest offshore windfarms
Yesterday SSE submitted an application to Scottish Ministers for consent to develop the Beatrice Offshore Wind Farm.
Beatrice Offshore Windfarm Limited (BOWL) is the joint venture partnership formed between SSE Renewables (75%) and Repsol Nuevas Energias UK (25%) (formerly SeaEnergy Renewables). In February 2009 BOWL was awarded an exclusivity agreement by the Crown Estate to develop the Beatrice Offshore Wind Farm in Scottish Territorial Waters.
The Beatrice Offshore Wind Farm site is located in the Outer Moray Firth on the north-western point of the Smith Bank. It is approximately 13.5km from the Caithness coastline. The development site will cover an approximate area of 131.5km² .
The site is approximately 11km from the world’s first deep water wind farm development – the two-turbine (10MW) Beatrice Demonstrator Project. The Beatrice Demonstrator turbines are owned by SSE and Talisman. The turbines have been operational since 2007.
Building on the success of the Beatrice Demonstrator Project, the partnership is proposing to develop an offshore wind farm which will generate up to 1,000MW of renewable energy, enough to power over 796,000 homes. The proposed wind farm will have a maximum of 142 to 277 turbines, depending on turbine size.
The proposal will now be thoroughly scrutinised before a final decision is taken by Scottish Ministers. A decision is expected in around nine months. The application is the first of the Scottish Territorial Waters leases to be submitted for consideration and is the culmination of several years of data collation, environmental studies and consultation.
Korean giant abandons offshore wind plans for Scotland
Doosan Power Systems is abandoning its plans for developing offshore wind turbines in Scotland “in light of the overall economic conditions and liquidity issues in Europe”. Apparently the decision was made and the Scottish government were informed in December. Quite why this has only just come to light is not clear, but Doosan have made it very clear that they were not prevented by the Scottish government from releasing the news.
A spokesperson for the company said,
“The company remains committed to working in Scotland and the UK as a whole, as demonstrated by our continual investment in technology and product development as a global centre of excellence for the Doosan Group. We also continue to fully support the development of clean energy solutions.”
Wind industry lobby group RenewableUK pointed out that Doosan’s pullout was contrary to a predominantly positive trend:
“In the first quarter of this year we have seen Vestas submit a planning application for Sheerness, Siemens progress with plans for Hull, and of course the Gamesa announcement last month that they are discussing a memorandum of understanding with the port of Leith in the hopes of providing a factory employing 800 people. There have also been significant developments in the broader supply chain. Only last week Offshore Group Newcastle announced that they would create up to 1,000 jobs building foundations for offshore wind farms. With these developments, provided the policy framework and mood music [are] right, we remain convinced that we can achieve up to 90,000 people employed in wind, wave and tidal industries by 2020.”
This is a worrying development though, both for Scotland and for the UK renewables industry as a whole. The Coalition’s wavering and backtracking on green promises cannot be helping. Let us hope that Doosan is not just the first domino.
Claims offshore energy could destroy natural carbon sinks
Not content with his regular attacks on the onshore wind industry, Tory MEP and arch-NIMBY Struan Stevenson is now taking the battle to sea in an attempt to scuttle the Scottish government’s offshore wind ambitions. He will be speaking later today at a meeting he has organised in Brussels that will be attended by EU and Scottish Government stakeholders.
Stevenson had this to say ahead of the meeting:
“It is important that policy-makers understand and acknowledge the facts and key concerns about the impact of off-shore renewables development on our most important natural coastal resources.
“Marine vegetated habitats, in particular mangrove swamps, salt marshes and seagrasses form the earth’s so-called ‘blue carbon’ sinks and store up to the equivalent of half of the emissions from the entire global transport sector every year. Moreover, seagrass meadows provide an important habitat for certain types of shellfish and finfish. They help maintain biodiversity, water quality and prevent coastal erosion. Their presence and abundance is therefore a good measure of the environmental quality of the entire coastal zone.
“Around one third of the planet’s blue carbon sinks have been lost already, much of it in the past two decades. It is therefore vital that we begin to understand Scotland’s key role in this process and take steps to protect what’s left. Our long coastline is home to one fifth of Europe’s seagrass meadows. Yet the remainder is now threatened by the current renewables ‘gold rush’ as developers seek to construct more and more large-scale offshore windfarms.
“Seagrasses are largely unrecognised because they grow under the water. That needs to change. We must maintain and restore coastal carbon storage ecosystems in Scotland rather than allow their wanton destruction. The headlong rush for costly, unreliable and intermittent renewables is totally counterproductive and is doing more harm than good. We need to re-think our energy strategy and concentrate on systems that have a positive rather than a negative impact on climate change.”
I don’t know who has put the notion into Struan’s head that he can use seagrass as a stick to beat the offshore wind industry with, but a couple of counter-arguments immediately spring to mind:
~ As with onshore wind, only a small percentage of the landscape (or sea floor in this case) over the area of the windfarm is disturbed by the installation of turbines.
~ The amount of carbon that would be stored by the allegedly displaced seagrass is tiny – it is a small plant. It also – like ordinary grass – tends to grow and spread back over temporarily disturbed areas of seabed.
No-one is denying the importance of so-called ‘blue carbon’, but the idea that more carbon will be stored by the tiny amount of allegedly displaced seagrass than will be saved by the generation of low-carbon wind electricity over the lifetime of a turbine is surely a straw too far for the turbophobes.
Among the attendees will be representatives from Communities Against Turbines Scotland (CATS) and No Tiree Array (NTA). It is surprising to see NTA wasting their time with Stevenson – they may have a genuine conservation ace up their sleeve with the Great Northern Diver, so it is hard to see why they are willing to risk damaging their credibility by dallying with fanatics like Stevenson and clowns like Trump.
A huge vote of confidence in Scotland from a major investor
Wind turbine manufacturer Gamesa today gave a huge vote of confidence to the Scottish renewables sector and the UK offshore wind industry by announcing their plans to build a major manufacturing facility in Leith to produce the giant wind turbines that are set to be deployed around the British coast during the rest of this decade.
The new facility will manufacture the blades and machinery for these massive machines. The project could be worth around £125m of investment and is expected to support over 800 direct jobs.
Gamesa’s offshore wind business HQ is in London, but their Research and Development centre is in Glasgow. This announcement shows Gamesa’s commitment to establishing Scotland as the main focus of their worldwide offshore wind business, and yet again gives the lie to the nonsense being spouted about the referendum scaring off investors.
(The other city on Gamesa’s short list was Hartlepool).
Welcoming Gamesa’s announcement, Prime Minister David Cameron couldn’t resist the opportunity to slip the ‘U’ word in:
“This is fantastic news for Scotland and shows that the UK remains an attractive place for foreign investment. Scotland benefits from UK wide initiatives to promote renewables and access to the entire UK consumer market. That coupled with the economic security that comes from being part of one of the world’s most successful unions makes Scotland an obvious place for companies like Gamesa to invest in.”
Ed Davey similarly couldn’t resist a rather pointless and unconvincing plug for the Union, saying:
“I am delighted that Gamesa has chosen to invest in Leith and cement its commitment to the UK offshore wind market. This was clearly a closely run race between two excellent locations – a powerful message to the offshore wind industry that the UK is the place to be. Projects like this have the potential to bring investment and support jobs across the whole of the country. Being a United Kingdom means we can attract the large investment necessary and keep costs down.”
Welcome to Scotland, Gamesa. You’ve made the right choice.
SNP welcome Gamesa jobs announcement (from the SNP website)